Dow Jones Forecast: Stocks slip with bonds in focus after jobs data
US stocks are set to open mildly lower as as treasury yields inch higher and US jobless claims remain low by historical standards. The jobless claims data comes after weak ADP payroll data yesterday, which helped to spark a recovery in treasuries -although the recovery in the bond market appears to have been short lived. Investors will keep a close eye on treasury yields as Fed speakers come into focus.
Share this:
US futures
Dow futures -0.21% at 33030
S&P futures -0.22% at 4251
Nasdaq futures -0.15% at 14749
In Europe
FTSE +0.6% at 7458
Dax +0.02% at 15097
- US jobless claims rise to 207k from 205k
- US bond yields climb higher fueling fears of a hard landing
- USD holds steady after data
- Oil slumps for a second day
US jobless claims remain low
US Stocks are pointing to a modestly weaker open after gains in the previous session and as investors digest the latest cues from the US labour market.
US jobless claims showed that 207k Americans filed for unemployment benefits for the first time last week, which was up from 205k the previous week but slightly below the 210k expected and remain low by historical standards. The data comes after yesterday's ADP private payroll which showed 89,000 jobs were added in September, well below estimates of 160k and down from 180k previously.
Yesterday’s figure revived hopes that the US labour market could be cooling which could encourage the Federal Reserve to adopt a less hawkish tone and question rate hikes this year.
Investors will be keeping an eye on sovereign bond yields as both the 10-year and the 30-year treasury yields inched higher, suggesting that yesterday's rally in the bond market could be short-lived. Concerns are rising that the sharp rise in bond yields in recent weeks could take its toll on some parts of the financial system.
Looking ahead attention will be on fed speakers with Cleveland Fed President Loretta Mester due to speak along with Mary Daly and Barkin.
Corporate news
Constellation Brands is set to open unchanged despite the drinks maker lifting its annual profit guidance after Q2 sales beat forecasts.
Exxon is falling 1.2% pre-market as oil prices drop, but the oil giant also said it would deliver Q3 operating profit between $8.3 billion and $11.4 billion, which was below last year's record earnings although up from Q2
Blackberry is rising pre-market after the tech firm announced that it would separate its Internet of Things and cybersecurity business units. It plans an IPO for the Internet of Things business next fiscal year.
Dow Jones forecast – technical analysis.
The Dow Jones has risen from yesterday’s low of 32815 and while the RSI remains in oversold territory, the rebound is lacking momentum. Buyers would need to retake 33220, Monday’s low to build confidence in a recovery and extend gains 33600 the July low and expose the 200 sma at 33820. Sellers will be looking to take out support at 32815 to create a lower low and extend the bearish trend towards 32675 the May low.
FX markets –USD falls, EUR rises
The USD is falling lower for a second straight day as yields steady and as investors digest the latest jobless claims data and look ahead to US non-farm payroll figures tomorrow.
EUR/USD is rising, capitalising on the weaker U.S. dollar even as investors digest more disappointing data. German exports plunged by -1.2% in August after falling 1.9% in July, highlighting the weakness in the eurozone's largest economy. Meanwhile, French industrial output also unexpectedly declined by 0.4%. ECB policymaker Peter Kazimir said that the rate hike last month was likely the last although more data is needed to confirm this.
GBP/USD is holding steady around 1.2125 after gains in the previous session. GBP is managing to brush off data that showed the construction in industry saw the biggest slide in activity in more than three years. The construction PMI fell to 45 in September, down from August's 50.8. This was one of the sharpest falls in housebuilding since the 2008-2009 recession.
EUR/USD +0.09% at 1.0505
GBP/USD -0.08% at 1.2124
Oil slumps further
Oil prices are falling further, extending yesterday's slide, which saw oil prices fall by over 5% as concerns over the demand outlook overshadow the prospect of ongoing tight supply from OPEC.
Oil fell a 5% on Wednesday marking its largest daily decline in over a year, as concerns over the deteriorating economic outlook and weaker oil demand pulled oil prices lower even though Saudi Arabia and Russia reiterated that they will continue the voluntary output cuts until the end of the year.
US service sector PMI data slowed in September and ADP payrolls dropped sharply. Data from the eurozone was also weak and pointed to a likely contraction in the third quarter and a possible recession in the second half of the year. As economies, the oil demand outlook weakens pulling oil prices lower.
WTI crude trades -1.5% at $81.99
Brent trades -1.5% at $84.35
Looking ahead
14:00 Fed Mester
15:00 Cad. Ivey PMI
16:30 Fed Barkin
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/CAD forecast: rally could accelerate above June highs at 1.4250
USD/CAD recovered quickly after weaker US jobs data, keeping the bullish trend in focus. A move above the June highs could accelerate the rally as inflation keeps the Fed under pressure.
Dow Jones Slide Shows What Rate Hike Bets Mean for Stocks
The Dow Jones support breakdown shows rising bond yields and rate hike bets hitting U.S. stocks while tech giants prop up the Nasdaq.
Dow Jones Forecast: DJIA rises after weaker jobs data
U.S. stocks are rising after weaker-than-expected U.S. jobs data saw markets rein in rate hike expectations.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.